the field when these conversations occur which makes it more difficult to document their conversations. Whether producers enter the information in the AMS system themselves or relay the information to a CSR to enter, it should be entered by somebody.
4. It is becoming increasingly difficult to get signed applications.
Although in Kansas a signed application is not a silver bullet in preventing or defending E & O claims, it can still be a powerful defense under certain circumstances. The problem is it is becoming more and more difficult to get signed applications. Many carriers do not require signed applications for certain lines of insurance. Many carriers have proprietary electronic applications that don’ t even have a place for the customer to sign. I defended one case where the carrier couldn’ t even produce a complete copy of the electronic application that was submitted. Their software wouldn’ t allow them to do that. Unfortunately, the part the carrier couldn’ t produce was the part we needed in defending the case. Even though carriers may not require that signed applications be submitted the agency contracts of these carriers may actually require the agency to obtain and keep signed applications. Although we understand the difficulty of getting a signed application we still recommend getting one whenever possible.
5. Demands for detailed certificates of insurance are creating significant problems.
In virtually every audit I conducted the staff was dealing with often unreasonable demands for information on certificates of insurance. I wish I had an easy answer for this problem, but I don’ t. It all depends on exactly what the certificate holder is demanding. There are a few general guidelines, however. Most importantly, in Kansas, by law, an agent cannot issue a certificate on a form that has not been filed and approved by the Insurance Department. So if a certificate holder wants an agency to issue a certificate on the holder’ s own form, the proper response is to ask if the form has been filed and approved by the Insurance Department. Even if the holder’ s form is called something else, like“ supplemental insurance information request” it is still, in my opinion, a certificate, and an agent is still
prohibited from issuing it unless it has been filed and approved. Also an agency should never provide information on a certificate unless it knows the information is accurate. Finally, most carriers will tell agencies they don’ t want copies of certificates of insurance. I always tell agencies to send them anyway with an accompanying e-mail to prove they’ ve been sent.
Will Larson is legal counsel for the KAIA. He is a partner in the law firm of Larson & Blumreich Chartered. He has practiced in the field of Insurance Law since graduating, Magna Cum Laude, from Washburn law school in 1977. He is currently President of the Insurance Section of the Kansas Bar Association. He has represented the Association since 1980. In 2013 he partially retired and limited his practice to solely representing the KAIA. As part of your member benefits he is available at the Association to answer legal questions and assist you with legal issues. He can provide inhouse continuing education presentations as well as agency E & O audits that allow agencies to obtain multi-year credits on their E & O coverage when implemented. For more information contact Will Larson at will @ kaia. com or call 1.800.232.0561
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26 KANSAS INSURANCE AGENT & BROKER | September- October 2016 |